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Russia Slashes 2021-2022 Oil Production Forecasts

Russia Slashes 2021-2022 Oil Production Forecasts

Russia is slashing its estimates…

Mexico’s Pemex To Drill 3x More New Wells In 2019

Pemex will drill three times more new wells this year than previously planned, Reuters reported, citing the company’s chief executive. This should boost production by 300,000 bpd by 2022, which would be a new record, CEO Octavio Romero said at a presentation.

Pemex has been struggling with declining oil and gas production for over a decade. The previous government opened up the industry to foreign investment by organizing several tenders for oil and gas blocks in a bid to reverse the fall. The new government, however, has suspended tenders until it reviews the contracts signed by the previous administration.

The Obrador administration has prioritized the increase in local oil and gas production and to this end earlier this year provided a US$3.6-billion lifeline for Pemex, who had accumulated uncomfortable amounts of debt—US$106 billion—over the past few years. Boosting production is crucial for the company and the government, which has promised better energy security for Mexico.

“In Petroleos Mexicanos’ entire history, it has perhaps never developed 20 new fields in one year,” Romero told media, adding that these measures should help production begin to climb up as early as this year. At the moment, it is 1.68 million bpd but, Romero said, “We can expect this level of production to be maintained and that it will begin to grow from this year.”

President Andres Manuel Lopez Obrador has promised that by the end of his term in office, Mexico will produce almost 2.5 million bpd of crude – a level close to the 2013 average of 2.522 million bpd.

As part of the production decline reversal plan, Pemex also increased its spending plans for this year. In December, the company said it had budgeted US$23 billion for 2019, up by 15 percent on 2018. Half of the total will be directed towards exploration and production, with some onshore deposits also benefitting from the investment alongside shallow-water blocks. Exploration in the deep waters of the Gulf of Mexico, however, will be put on hold.

By Irina Slav for Oilprice.com

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